EU grants fiasco compensation urged

Friday 16 January 2009 00:12 BST

The Parliamentary Ombudsman has found farmers suffered injustice over EU grants

A Government agency has been urged to apologise and pay compensation to farmers after the Parliamentary Ombudsman found they had suffered injustice as a result of its maladministration of EU grants under the Single Payment Scheme.

The Ombudsman's finding came as a scathing MPs' report described the oversight of the £1.6 billion-a-year scheme in England as "a singular example of comprehensively poor administration on a grand scale".

The cross-party House of Commons Public Accounts Committee blamed "poor leadership" in the Rural Payments Agency and "complacent oversight" from the Department for Environment, Food and Rural Affairs (Defra). And the MPs questioned the decision to pay an £11,000 performance bonus to RPA chief executive Tony Cooper despite ongoing problems with the scheme.

The report by Ombudsman Ann Abraham follows an investigation into two farmers who suffered financial loss, stress and anxiety as a result of the chaotic introduction of the scheme in England in 2005. Ms Abraham said the men - identified only as Mr W from North Yorkshire and Mr Y from East Anglia - were representative of 22 other complaints made to her office.

She called for the RPA to apologise in writing to the two farmers, pay Mr W £3,500 and Mr Y £5,500 and review the other cases for unremedied injustices caused by its failure to determine entitlements and make payments on time. But she said farmers were receiving only "cold comfort" from the Government, after Defra disputed her findings and agreed to make "consolatory payments" of just £500 to the farmers.

Ms Abraham said: "These failures of the 2005 Single Payment Scheme took a direct personal and financial toll on the two farmers whose complaints I have investigated. My report shows that the RPA was unable to keep its timetable for handling the digital mapping of land or for making payments to farmers. But RPA continued to tell farmers that it would keep its payment timetable, when it knew, or should have known, that the timetable was increasingly unrealistic."

Ms Abraham added: "My view is that an appropriate remedy should be forthcoming where injustice has been suffered as a consequence of maladministration by a public body. It... saddens me that a public body refuses to provide relatively modest financial remedy for substantive injustice to people whose complaints have been referred to the Ombudsman by Members of Parliament and which the Ombudsman has upheld following an independent investigation."

In a separate report on the operation of the scheme, the Public Accounts Committee said that despite efforts over the past two and a half years to speed up payments to farmers in England, the RPA was still six weeks off its own target deadline and "a long way short" of standards set in Scotland, Wales and Northern Ireland.

After carrying out three investigations in three years into the scheme, the PAC took the unusual step of demanding regular reports from Defra - the first in January next year - on action it is taking to improve its operation. A £350 million computer system was "cumbersome, overly complex and at risk of becoming obsolete", data held in the system was "riddled with errors" and efforts to recover over-payments have been "slow, disorganised and haphazard", said the committee.

The National Audit Office found that claims cost an average of £1,743 to process in England, six times the £285 level in Scotland. The committee described the cost of administration as "unacceptably high" and dismissed Defra's own estimate of £700 for the cost of each claim as an unconvincing "smokescreen". The PAC report found that the RPA was "heavily reliant" to keep its IT systems operating on consultants Accenture, which it has paid £84 million over the past two years.